Starboard Asks Darden for Investor Meeting on Red Lobster

April 22 (Bloomberg) -- Starboard Value LP asked Darden
Restaurants Inc. to hold a special shareholder meeting where the
fund will present a resolution asking the company not to spin
off or sell Red Lobster before its annual meeting, unless
investors approve a deal.

Holders of more than 55 percent of the restaurant chain’s
stock asked for the meeting in a letter the New York-based fund
delivered to Darden, Starboard said in a statement today.

“We have chosen to deliver the consents to Darden now in
order to ensure that the special meeting is held as soon as
possible and that Darden receives the strong and clear message
that shareholders want a say on any transaction to separate Red
Lobster,” Starboard Chief Executive Officer Jeff Smith said in
the statement.

Darden’s plan to spin off Red Lobster is “just a bad
idea” that would create an underperforming stock and deprive
the parent company of almost half of its real estate, Smith said
earlier today at the Active-Passive Investor Summit in New York.
He reiterated Starboard’s proposal that Darden instead slash
operating costs and unlock value in its real estate via a sale
or real-estate investment trust transaction.

Darden will address Starboard’s request for a special
meeting “as appropriate,” it said in a separate statement.

“Shareholders have told us that while they may support the
calling of a special meeting, they have not decided on how they
will vote at the meeting itself,” Darden said.

The restaurant chain said it will continue discussions with
shareholders and reiterated that its pursuit of a separation of
Red Lobster through a sale or spinoff is in the best interest of
investors.